Obama’s State of the Union goals, six months later

A look at how far we have(n’t) come since the speech.


President Barack Obama delivers his sixth State of the Union address on January 28, 2014. (Charles Dharapak/AP)

Six months ago today, President Obama stood before Congress and outlined a number of ambitious goals for the year ahead, focusing much of his attention on ways to accelerate the slow economic recovery.

“I believe this can be a breakthrough year for America,” Obama said during his sixth State of the Union address, later urging lawmakers to “make this a year of action.”

Now halfway through, it’s looking a lot like another year of inaction. Here’s an update on some of the most notable objectives the president laid out during his speech on the issues affecting entrepreneurs, employers and the economy.

Goal: Overhaul the tax system

Obama: “Our tax code is riddled with wasteful, complicated loopholes that punish businesses investing here, and reward companies that keep profits abroad. Let’s flip that equation. Let’s work together to close those loopholes, end those incentives to ship jobs overseas, and lower tax rates for businesses that create jobs here at home.”

Status: Going nowhere fast

Small business advocates have for years been lobbying for an overhaul of the tax code, and at this time last year, it looked possible, what with the top tax writers in both the Senate and House traveling the country to drum up support for tax reform.

That was then. Now, with half of that duo halfway around the world, (former Senate Finance Committee Chair Max Baucus earlier this year stepped down to become the United States ambassador to China), and with lawmakers split on whether tax reform should include lowering individual rates or simply addressing the corporate tax system, a comprehensive deal seems increasingly unlikely.

And as for turning the tide on companies shifting their profits abroad — if anything, that has only become more prevalent. Already this year, nine American companies have inked deals known as “tax inversions” in which they move shift their corporate headquarters to countries with lower rates.

Goal: Fix our immigration system

Obama: “When people come here to fulfill their dreams – to study, invent, and contribute to our culture – they make our country a more attractive place for businesses to locate and create jobs for everyone. So let’s get immigration reform done this year.”

Status: Not happening

Despite ranking at or near the top of priority list for both parties, efforts to pass comprehensive immigration reform have run out of steam in Congress.

House Speaker John Boehner (R-Ohio) put the nail in the coffin a few weeks ago when he told Obama that Republicans would block any further attempts on immigration reform for the remainder of the year, saying his party has little confidence in the administration’s ability to enforce existing laws. It appears both sides are now ready to throw in the towel until after Obama leaves office.

Goal: Raise the minimum wage

Obama: “This will help families. It will give businesses customers with more money to spend. It doesn’t involve any new bureaucratic program. So join the rest of the country. Say yes. Give America a raise.”

Status: States and cities taking action

On this issue, the president made his plea not only to Congress, but to governors and mayors around the country, too. So far, he has had much better luck with some of those state and local officials.

In March, Connecticut became the first state to raise its minimum wage to the president’s target of $10.10 per hour. A month later, West Virginia approved a bill hiking its minimum from the federally mandated $7.25 to $8.75 over the next two years, while Minnesota raised its hourly wage floor to $9.50.

In May, Hawaii answered the president’s call, too, moving to $10.10. Several other states are currently considering similar proposals.

In Seattle, the city council made headlines last month when it approved an increase in the city’s minimum wage to $15 an hour, by far the highest in the country. And San Diego has lifted its minimum to $11.50.

Back in Washington, Obama has signed an executive order mandating that all federal contractors pay their employees at least $10.10 per hour, and he has urged employers in other sectors to do the same. Still, odds remain low that Congress will take action any time soon on the federal wage minimum, which has stood at $7.25 an hour since 2009.

Goal: Invest in infrastructure

Obama: “In today’s global economy, first-class jobs gravitate to first-class infrastructure. We’ll need Congress to protect more than three million jobs by finishing transportation and waterways bills this summer.”

Status: Still pending, but looks promising

On the verge of a potentially crippling shortage of highway and transit funding, Congress appears ready to temporarily refill the Department of Transportation’s Highway Trust Fund. Without action, the fund would have run dry in August, and it briefly appeared as though Democrats and Republicans were readying for a standoff over how long to extend it.

But the Senate last week passed an $11 billion proposal similar to one approved recently in the House, which would carry the fund through May. It’s likely that senators will in the end simply adopt the House measure, which will then head to the president for his signature, averting a major spending crisis just before the midterm elections.

Goal: Help entrepreneurs export

Obama: “When 98 percent of our exporters are small businesses, new trade partnerships with Europe and the Asia-Pacific will help them create more jobs. We need to work together on tools like bipartisan trade promotion authority to protect our workers, protect our environment, and open new markets to new goods stamped “Made in the USA.”

Status: Mixed bag

The United States has been working on a pair of free trade agreements—one with members of the European Union, the other with a dozen nations in the Asia-Pacific region— for years. The Obama administration has made it a priority to ink both those agreements before the conclusion of his second term, and while the deals are far from complete, European and Asian trade officials have commended the White House’s effort and appear to be making headway on the terms of the agreements.

At the same time, another key exporting resource used by businesses is in jeopardy.

The charter for the federal Export-Import bank, which provides low-cost financing to foreign buyers of American goods, expires later this fall, and a shakeup in the Republican leadership in Congress last month has put reauthorization in doubt. Over the past five years, Ex-Im has helped finance nearly $200 billion in exports, much of it to firms like Boeing and General Electric, but still millions toward small business exporting, too.

Goal: Stop patent trolls

Obama: “We know that the nation that goes all-in on innovation today will own the global economy tomorrow. This is an edge America cannot surrender. . . let’s pass a patent reform bill that allows our businesses to stay focused on innovation, not costly, needless litigation.”

Status: Hopes dashed — or are they?

This spring, after the House had easily approved a sweeping package of changes meant to curb abusive patent infringement lawsuits, the Senate seemed ready to take up the proposal and potentially push it through to the president. However, in a sudden about-face, the Senate Judiciary Committee, citing a breakdown in negotiations, pulled the legislation from its agenda.

It appeared at the time that the move had squashed any shot at passing patent reform this year. But supporters found a glimmer of hope earlier this month when a House Energy and Commerce’s subcommittee approved a more narrow bill meant to make patent-related lawsuits more transparent. Still, with the August recess and midterm elections right around the corner, time may not be on the bill’s side.

Goal: Create jobs through manufacturing

Obama: “We also have the chance, right now, to beat other countries in the race for the next wave of high-tech manufacturing jobs. My administration has launched two hubs for high-tech manufacturing in Raleigh and Youngstown, where we’ve connected businesses to research universities that can help America lead the world in advanced technologies. Tonight, I’m announcing we’ll launch six more this year.”

Status: Still early, but so far, tepid results

While the manufacturing hubs are well on their way, skepticism is mounting over their intended economic benefits. Reuters earlier this year reported that the administration’s original innovation hub, a 3-D printing facility in Youngstown, Ohio, has shown “no obvious signs of a wider impact” in terms of boosting manufacturing jobs. In fact, the number of factory jobs in the area has actually dropped since August 2012, when the center opened.

“The manufacturing initiative could help create jobs for people with highly specialized skills, such as engineers,” the report states, “but it may do far less to help people struggling to find work after the shuttering of local steel mills.”

Goal: Restore faith in the government

Obama: “I’m committed to making Washington work better and rebuilding the trust of the people who sent us here.”

Status: Still missing the mark

It’s no secret that Obama’s and Congress’s approval ratings (40 percent and 15 percent, respectively, according to Gallup) have long been in the cellar. Still, recent polling suggests the nation’s business owners may be even more fed up with their elected officials than the rest of America.

A poll released last month by the National Small Business Association showed that only 7 percent of employers believe their representatives in Washington represent them well, and a meager 4 percent approve of the current political system.

Related: Compare to last year’s six-month SOTU scorecard

Follow J.D. Harrison and On Small Business on Twitter.

J.D. Harrison covers startups, small business and entrepreneurship, with a focus on public policy, and he runs the On Small Business blog.
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